Delek Group's leader says that Israel mustn't retroactively change its royalty rate, and that he has rejected a claim by Lebanon that Israel is trying to steal its gas.

Reporting from Tel Aviv — As head of one of Israel's biggest conglomerates, Asaf Bartfeld is no stranger to looking out for his company's interests.

But the chief executive of Delek Group, an energy, automotive and real estate firm, is facing one of his biggest tests. Bartfeld is a key player in a bitter fight with the Israeli government over the division of revenue from massive natural gas reserves in the Mediterranean that may be worth hundreds of billions of dollars.

At the same time, he's having to cope with allegations from neighboring Lebanon that Israel is trying to steal its gas, claiming that the fields extend to Lebanon's territorial waters.

Natural-resource-poor Israel has been elated over the discovery last year of the Tamar gas field, about 50 miles off the coast of the northern city of Haifa. The field could provide enough gas to supply the country for 35 years. Delek, controlled by Israeli billionaire Yitzhak Tshuva, hopes to begin production in 2012 on the site, which they believe has 8.4 trillion cubic feet of recoverable gas.

But the announcement this summer of another nearby field, known as Leviathan, has caused much greater excitement because it could be twice as big as Tamar. Delek owns 31% of Tamar and 45% of Leviathan; the rest is held by Houston-based explorer Noble Energy and several Israeli partners.

The discoveries have raised hope that Israel could not only solve many of its domestic energy needs and reduce reliance on foreign suppliers, but could even become a gas exporter.

Investors in publicly traded Delek wonder how the claim by Lebanon might affect profits. Others fear the gas fields could become a target for terrorists.

Bartfeld spoke with The Times about why he rejects the government's proposal to increase its share of revenue from the gas discoveries from the current 12.5% (set in 1952) and what he thinks of the dispute between Israel and Lebanon and the prospects of Israel becoming a gas exporter.

Q: It's being said that the Leviathan discovery could transform Israel into a natural gas exporter. Isn't that too optimistic? How many years are we away from that?

A: First of all, we have to drill Leviathan to understand if there is gas. It's a little premature to speak about a discovery at this stage. Still, the geological probability of success is 50%, which is very high. Assuming there will be gas at the amount that is expected, which is 16 trillion cubic feet, this will be the largest amount of gas ever to have been discovered in Israel. Along with Tamar, these amounts are too large for the Israeli market and therefore it is likely that gas will be exported. But it could take a few years.

If Israel exports gas, the target markets could be Europe and the Far East. Most of Europe's gas is coming from Russia and they badly need alternative sources. And in the Far East, the prices for liquid gas are very high in countries like Japan and South Korea because they don't have their own resources. So it makes economic sense to ship the gas there as well.

Q: Some analysts say that gas fields have gone undeveloped partly because big Western oil and gas companies avoided working in Israel so that they won't offend major Arab producers. What's your opinion?

A: Other than our partner Noble Energy, it's a fact that major international exploration and production companies are not working in Israel.

But I don't see politics as one of the main reasons for why the fields have been unexplored. The main reason is that the technology needed to drill in such deep water was developed only in the last 10 years. Nobody in the world could drill to reach these depths 15 or 20 years ago. For example, Tamar, which was the world's largest single gas discovery in 2009, is at a depth of over three miles.

Q: Lebanon claims the reserves extend to its territorial waters. Are you worried that Lebanon could disrupt drilling, and that this site could become atarget for the Lebanese militia Hezbollah, which could shoot missiles at it?

A: I have rejected Lebanon's claim again and again. Under international law, all the fields and the licenses are within Israel's territorial waters. Investors have asked me this, and I tell them that under international law, we are feeling very comfortable with our position. [The threat of a terrorist attack] is an issue that has to be taken care of by the government and not by a private company.

Q: The Israeli government is now trying to retroactively hike the royalties it gets from the fields, saying the original rates were too low and the public should benefit more from the country's natural resources. Does it have a point?